The Middle East witnessed a moderate third quarter in 2014 torn between an international decline of oil prices and heightening regional security uprisings. As oil production flooded the international market triggering prices downwards, Saudi Arabia, with its low production costs, remained able to bear the declining prices and preserve its market share. Besides its ability to manipulate oil output and prices and its robust private sector performance, the kingdom maintained its humanitarian assistance to Syria, Iraq, and Lebanon that were mainly suffering the continuous upheavals. Amid the international oil crisis, several oil-exporting countries preserved their diversification strategies away from oil in favor of tourism, infrastructure, and construction projects. Qatar spent billions of dollars on construction projects to host the 2022 World Cup, in spite of the continuous controversy on the country hosting the tournament due to alleged corruption and weather concerns given the high temperatures that reign in the country during the summer season. As for the United Arab Emirates, gargantuan projects continued to be the Emirates’ approach to escape their oil dependency in Q3 2014 with particular attention to tourism. Emirati projects stretched to the Egyptian territory with Arabtec’s housing project in 13 locations across the country, of which Cairo, Luxor and Alexandria. Nonetheless, the African republic saw a prosperous third quarter following Al-Sisi’s structural economic reforms and relative political stability. Crossing the waters of red sea from Egypt to Jordan, the Hashemite Kingdom focused on fighting regional turbulences and concentrated on domestic reforms to accelerate economic growth. Moving to the ailing Syria, the continuous internal conflict preserved its momentum, worsening the economic conditions of the country amid deteriorating security circumstances. Finally, the presidential vacuum kept overshadowing Lebanon that witnessed a volatile third quarter marked by attacks against the Lebanese army in Arsal. This was aggravated by the spillovers and costs of the Syrian refugees on Lebanon that kept on fighting to regain investors and tourists’ confidence to enhance its vulnerable economic outlook.
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MENA Review and Quarterly Outlook – Q3 2014